ACS Gautam Singh
2. In the Companies (Accounts) Rules, 2014, (hereinafter referred to as principal rules), in Rule 6, for the second proviso, the following proviso shall be substituted via Companies (Accounts) Amendment Rules, 2016 notified vide Notification dated 27.07.2016, namely:-
“Provided further that nothing in this Rule shall apply in respect of preparation of consolidated financial statements by a company if it meets the following conditions:-
(i) it is a wholly-owned subsidiary, or is a partially-owned subsidiary of another company and all its other members, including those not otherwise entitled to vote, having been intimated in writing and for which the proof of delivery of such intimation is available with the company, do not object to the company not presenting consolidated financial statements;
(ii) it is a company whose securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India and
(iii) its ultimate or any intermediate holding company files consolidated Financial Statements with the Registrar
To put more clarification see to the below graphical representation:
Let assume there are 3 Companies A Limited, B Limited and C Limited. There holding in each other are as:
Fig. 1.1
Fig. 1.2
Fig. 1.3
Fig. 1.4
Note[1]
[1] (i) B Limited is a partially-owned subsidiary of A Limited and all its other members, including those not otherwise entitled to vote, having been intimated in writing and for which the proof of delivery of such intimation is available with the B Limited, do not object to the company not presenting consolidated financial statements;
(ii) B Limited securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India and
(iii) A Limited, the Ultimate holding company of B Limited files consolidated Financial Statements with the Registrar.
Please note in Fig. 1.1 Diagram the lines in B Limited will be read as “Holds 80% EQ in C Limited” and in C Limited the lines to be ignored.